Veterans who fell behind on their VA loans during or after financial hardship have a new lifeline sitting right in front of them. The VA’s new partial claim option — officially called the Veterans Affairs Servicing Purchase (VASP) program’s successor structure — lets eligible borrowers move missed payments into a separate subordinate loan, wiping the slate on their main mortgage without a foreclosure or a forced sale.
That’s a big deal. But here’s the problem: servicers aren’t required to offer it until November 28, 2025. And many won’t do it a day early unless you ask.
What the Partial Claim Actually Does
Think of the partial claim like a compartment. Your servicer advances the amount you owe in back payments — principal, interest, fees — to bring your first mortgage current. That overdue balance gets parked in a second, subordinate loan. You don’t pay it now. It sits behind your primary mortgage and gets resolved when you sell, refinance, or pay off the home.
Your main mortgage picks up where it left off, current and performing. No credit hit from a short sale. No foreclosure on your record. For a veteran in Glendale or Gilbert who bought at a 3.25% rate in 2021 and has no realistic option to replace that loan, this tool preserves something genuinely irreplaceable.
Here’s what you need to qualify:
- Your VA loan must be in default or at risk of default
- You need to demonstrate a financial hardship — job loss, medical bills, divorce, death of a co-borrower
- You must be able to resume regular monthly payments going forward
- The property must be your primary residence
The subordinate claim itself is typically interest-free and non-amortizing, which means it doesn’t generate a monthly payment. You just carry it until a triggering event resolves it.
Why Servicers Are Dragging Their Feet
The November 28 deadline is a regulatory compliance date. Before that date, servicers are technically not obligated to have their systems, staff, and paperwork workflows ready to process partial claims. For the big servicers — some of whom manage hundreds of thousands of VA loans — building out the backend takes time and money.
This creates a gap that hits veterans at the worst possible moment. Foreclosure timelines don’t pause because your servicer’s IT department is still coding the intake form. Foreclosures have climbed 21% in the first half of 2026, with VA and FHA loans carrying a disproportionate share of that stress. If you’re 60 or 90 days behind, waiting passively isn’t a strategy.
The good news: several larger servicers — Pennymac being the most notable example — have rolled out the program early. If your servicer is one of them, you may be able to file right now. Call your servicer’s loss mitigation department directly. Don’t go through the general customer service line — they often won’t even know this option exists.
What to Do Before You Call
Don’t pick up the phone without some preparation. Servicers are more likely to move fast when you show up organized.
Pull together:
- Your last 2–3 pay stubs, or documentation of any income interruption
- Two months of bank statements
- A written hardship letter — one page, plain language, explaining what happened and why it’s temporary
- Your most recent mortgage statement showing the overdue amount
If you’re working with a VA-approved housing counselor, get them on the call with you. HUD-approved housing counselors are free, and many specifically work with VA borrowers. The VA’s own website maintains a list. For Arizona veterans, the Arizona Department of Veterans’ Services in Phoenix also has housing assistance resources.
One thing to be clear about when you call: you want to be evaluated specifically for the partial claim option under the VA’s loss mitigation waterfall. Servicers are required to evaluate borrowers for all available options — but they’ll often lead with the easiest one on their side, which might be a repayment plan or loan modification that doesn’t serve you as well.
The Equity Angle Most Veterans Are Missing
Here’s something worth flagging. A lot of VA borrowers who bought between 2019 and 2022 are sitting on significant equity — even after the recent price softening. As of recent market data, Phoenix metro median home prices still hover around $420,000–$430,000. A veteran who bought a Chandler townhome in 2020 for $280,000 at 3% likely has six figures of equity even now.
That equity doesn’t disappear in a partial claim scenario. You keep it. Compare that to a foreclosure, where the bank takes the home, the equity evaporates in fees and losses, and you’re looking at a 2–3 year wait before you can even apply for another VA loan. Most real estate agents aren’t trained to walk military clients through this kind of distressed scenario, which is why veterans need to proactively seek out advisors who understand the VA loan ecosystem.
A Word on Timing
The clock matters here in two directions. First, the closer you get to a foreclosure sale date, the fewer options remain on the table. Arizona is a non-judicial foreclosure state — the process moves relatively quickly compared to many states, typically around 90 days from notice of trustee’s sale. Don’t wait until a sale date is posted on the Maricopa County Recorder’s website.
Second, the November 28 deadline is when servicers must be ready — it doesn’t mean anything automatically happens to your loan on that date. If you contact your servicer in October and they say “we’re not set up for that yet,” document that conversation and follow up weekly.
What to Do Right Now
If you’re a veteran behind on your VA loan, here’s the short version:
Call your servicer’s loss mitigation line today. Ask specifically about the VA partial claim. If they tell you it’s not available yet, ask when their target implementation date is and get a name. Then contact a HUD-approved housing counselor to help you track the servicer’s progress.
Don’t sell. Don’t hand the keys back. Don’t assume foreclosure is inevitable.
The program exists. The only question is how hard you push to use it before November forces your servicer’s hand.